PONMALAL GOUNDAR Vs. KAILASA GOUNDAR

JUDGEMENT

(1.) The respondent laid a suit to recover certain moneys from the petitioner due on a promissory note of which the respondent, as per plaint allegations, had taken an assignment for full consideration. In the plaint he stated that in spice of repeated demands, the defendant had not paid any amount to the original payee, either towards principal or interest. The defence in the written statement was that no cash consideration passed for the promissory note but it had been executed by way of a security and that after maturity, the plaintiff had taken an assignment with knowledge of it and that, therefore, the plaintiff was not a bona fide holder In due course. On those pleadings the issue was framed, whether the plaintiff was a holder In due course. He applied to amend the issue to read : "Whether the plaintiff is not a holder in due course - and this amendment was allowed. The petitioner, in this court seeks to revise the order. It is argued that since the plaintiff, as admitted by him in the plaint, was aware of the repeated demands made on the defendant, by the original payee, the plaintiff cannot be regarded as a holder in. due course and therefore, the order of the court below is erroneous.

(2.) S. 118 of the Negotiable Instruments Act, contains certain statutory presumptions which include that every transfer of a negotiable instrument was made before its maturity and that the holder of a negotiable Instrument was a holder in due course. Mr. Desikan for the petitioner argues that the first of these presumptions cannot apply and for that reason the second too. He refers to Sec. 22 which defines maturity of a promissory note as the date at which it falls due. That means, literally speaking, that the maturity is respect of a promissory note arises even on the day it is executed, for, where the promissory note is payable on demand, it becomes payable immediately. S. 9 defines a holder in due course in two parts. The first part says that the expression means a person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer. The second part is that a holder in due course means also the payee or endorsee of a promissory note, if payable to order, before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. One other provision which is relevant is Sec. 59 which says that the holder of a negotiable instrument who has acquired it after dishonour, whether by non -payment, with notice thereof, or after maturity, has only, as against the other parties, the rights thereon of his transferor.

(3.) In the light of these provisions, the question is whether the assignment of the promissory note was after its maturity and therefore, in that sense, the plaintiff cannot be regarded as a holder in due course. It seems to me that the doctrine of maturity in relation to a holder in due course is, in the nature of things inapplicable to a promissory note. It sounds strange to one's judicial sense that a promissory note which payable on demand, and therefore, immediately reached maturity at the moment of its execution, and at the same time a holder in due course in respect of the promissory note should be one who gets an assignment thereof before its maturity. Such a view involves contradictory premises. With due respect, I find myself In entire agreement with the observations of Pandrang Row, J. m Venkataramam v/s. Kanakasundara Rao, 44 L.W. 456 namely :